Cowen warns business chiefs to curtail pay hikes

TAOISEACH Brian Cowen last night told high-flying business executives they could not continue giving themselves massive salary increases while lecturing ordinary workers about the need for pay restraint.

Mr Cowen’s comments came as the country’s trade unions said that a call by business lobby group IBEC for a public sector pay freeze was a “non-starter”.

Talks on a new social partnership agreement began earlier this year and will involve the Government and business leaders reaching pay agreements with both public- and private-sector workers.

With the economy plunging into recession for the first time in 25 years, both the Government and business groups are desperate to avoid massive pay increases.

But Mr Cowen last night acknowledged the great hypocrisy that has surrounded the social partnership system for years, namely that senior business executives often get pay hikes which vastly outstrip the agreed increases for average workers.

Addressing an IBEC dinner in Dublin’s Mansion House, Mr Cowen said: “I have stressed the need for pay restraint in the context of these talks, given current circumstances, but let me also say that this must apply across the board.

“It is clear that the headline rate of pay increases for top-level executives in the private sector has not been aligned with this general message and this is a source of concern.”

Though the language was subtle, the message was blunt, and Mr Cowen’s comments came just hours after the Irish Congress of Trade Unions had delivered its own rebuff to IBEC.

Earlier , IBEC director of policy Danny McCoy said a public sector pay freeze was essential if the country was to negotiate the economic downturn.

Mr McCoy said the issue of public sector pay was “the elephant in the room” and needed to be addressed, particularly when many private-sector employees were facing wage cuts or the possibility of losing their jobs.

But ICTU general secretary David Begg said the call for a pay freeze was a “non-starter”. He said that prices for commodities such as oil and food would remain high or increase further, worsening the squeeze on workers.

“You may say to people that you cannot improve your situation, but it is very hard to say to them that you must disimprove your situation,” he said.

Meanwhile, Mr Cowen admitted in his speech that Ireland was “at a crossroads” given the deteriorating economic situation and “a number of difficult policy choices lie ahead”.

“On the one hand, we must safeguard Ireland’s future competitiveness in an increasingly volatile and globalised world,” he said.

“On the other hand, if we are to realise our goal of a fair and inclusive society, we also need to look after those on the margins who will be feeling the impact of rising food and energy prices more acutely than most.”


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